SAP Revenues Q3 2021

The logo of the German software group SAP is painted on May 12, 2016 at its headquarters in Walldorf, Germany.

Ralph Orlowski | Reuters

German software giant SAP improved its revenue performance in the third quarter on Thursday with a surge in revenue for its fast-growing cloud unit.

SAP’s third-quarter cloud revenue totaled around € 2.4 billion ($ 2.8 billion), up 20% from the year-ago quarter. Meanwhile, the backlog of cloud contracts was around € 1.3 billion, an increase of 58%.

Overall adjusted revenue was € 6.8 billion, up 5% year-on-year, supported by cloud growth. Meanwhile, adjusted earnings per share were up 2% to € 1.74 due to a profitable startup bet on spin-off company Sapphire Ventures.

Last year, SAP outlined a broad migration plan from on-premises IT infrastructure to remote cloud computing facilities. SAP’s new focus on the cloud has been a challenge for enterprise software rivals such as Salesforce and Oracle.

SAP stocks rose 0.7% as the European market launched a trading session on Thursday.

SAP CEO Christian Klein told CNBC’s Squawk Box Europe on Thursday that he “turned the company into the cloud.”

“We are changing our business model on our own … We are moving from an on-premises pre-license to a cloud subscription-based business model.”

Last week, SAP raised its full-year outlook for the third time this year, backed by the momentum of its cloud business. The company confirmed these goals on Thursday and said it expects cloud revenue to grow between 16% and 19% in 2021.

Klein said the company is “extremely confident” in its ability to overcome the uncertainty of the coronavirus and the disruption of the global supply chain.

“Technology helps overcome these challenges,” he said. “When we talk about the future of work, we need to drive collaboration. We need technology. When we talk about elastic supply chains, look at all the container ships in front of ports that are not accessible. Has technology in — where our business network can help — ”

SAP’s share price plummeted in October last year after lowering sales guidance due to concerns about its impact on Covid-19’s business spending. Since then, it has risen by more than 11% this year and is recovering.

SAP Revenues Q3 2021

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